http://www.miami.com/mld/miamiherald/ne ... 043410.htm

Posted on Wed, Mar. 08, 2006


IMMIGRATION
Help Mexico, lift all boats

BY ROBERT PASTOR
rpastor@american.edu

The Senate has begun an explosive debate on immigration reform. Some senators want to tighten border security; others propose a temporary-worker program and different formulas to ''regularize'' 11 million illegal workers in the United States. Adding the two approaches together will not make them more effective because each is flawed. But the bigger problem is not what they propose but what they omit.

None of the senators has proposed a strategy for solving the problem of illegal migration. The only solution is to reduce the gap in incomes between Mexico and the United States. If we don't start now with a bold program, illegal migration will only get worse.

About two-thirds of illegal migrants originate in Mexico. Surveys suggest that 90 percent have jobs when they leave; they come north to increase their income by eight times, on average. The flow of migrants increases when the income gap between the two countries widens. Some proponents of NAFTA argued erroneously that free trade would reduce the flow of illegal migrants, but the opposite happened because the development strategy implicit in NAFTA concentrated foreign investment on the border. Those firms attracted workers from the south and center of Mexico to the border and, after a time, to the United States for still higher wages.

Why don't businesses invest in southern Mexico where the same labor is cheaper and where there is no congestion? Because the region has little infrastructure (communications, roads) and no roads connecting the area to the markets in the north.

The European Union figured out this problem, invested great sums of money in their poorest countries and significantly reduced the income gap. Migration almost stopped. We would be foolish not to learn lessons from their experience. They succeeded because of free trade, foreign investment and a transfer of almost $500 billion in 20 years. About half of those funds were used badly, but the investment in infrastructure had a huge multiplier effect.

Since NAFTA began 12 years ago, the income gap between Mexico and its northern neighbors has widened. But that does not mean that NAFTA failed. The northern part of Mexico with good roads to the United States grew almost 10 times faster than the south and center of Mexico. The problem was that NAFTA was not enough to connect Mexico's south to the lucrative market to the north. Such investment is only possible if the three governments of North America articulate a vision of a community that would mobilize significant resources for a ''North American Investment Fund'' to boost Mexico's growth and close the gap.

How much? About $20 billion a year for a decade would close the gap by 20 percent. Europe invested twice as much for twice as long. Mexico should provide half the funds with new taxes; the United States, 40 percent; and Canada, 10 percent. The funds would be administered by the World Bank and invested in infrastructure.

The United States and Canada are unlikely to contribute, and their funds wouldn't be effective without Mexican fiscal, energy and electricity reforms. But instead of a quid pro quo, the three governments of North America should fashion a ''community'' of interests whereby each contributes to the region's growth. That might make it easier for Mexico to do the reforms that, with infrastructure funds, could jolt its economy into a higher orbit.

It's time for Congress to solve the immigration problem, not exacerbate it. This fund won't end illegal migration overnight or even in 10 years. But if Mexico begins to grow at twice the rate of the United States and Canada, Mexicans will begin to think about their future in Mexico rather than plan for their exit north.

The prospects of approving such a proposal now are not good, but the question is not whether it is feasible, but whether it is desirable and will serve U.S. and North American interests. For too long, we have been reacting to crises rather than investing in our future. There is no more important investment than forging a community among our neighbors that could close the income gap and address our many problems, including migration.

Robert Pastor is director of the Center for North American Studies at American University in Washington, D.C. He is the author of Toward a North American Community: Lessons from the Old World for the New.